Court rules interim bank account attachment not authorized under Customs Act.

The Court held that the authorities did not have the power to pass an interim order of attachment of bank accounts under Section 121 of the Customs Act, 1962. It was determined that while Section 121 allows for confiscation of sale proceeds of excisable goods, it does not explicitly authorize the interim attachment of bank accounts pending investigation. The Court emphasized that such authority was not envisaged under the Customs Act, directing the authorities to proceed against the petitioners within legal boundaries. As a result, the suspension of the petitioners' bank accounts was deemed unsustainable, and the writ petition succeeded without costs imposed on either party.

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Issues:
- Whether the authorities have the power to pass an interim order of attachment of bank accounts pending investigation under Section 121 of the Customs Act, 1962Rs.

Analysis:
The petitioners challenged the order of the Director General of Central Excise Intelligence, Zonal Unit, which temporarily suspended the operation of their bank accounts due to alleged manufacturing activities of chewing tobacco without proper registration. The petitioners argued that there was no legal authority for the interim attachment of bank accounts without issuing a show cause notice, citing previous judgments. On the other hand, the respondent authorities contended that Section 121 of the Customs Act empowers them to confiscate sale proceeds related to excisable goods, justifying the bank account suspension. They emphasized that the power to attach bank accounts is inherent in Section 121 when excisable goods are sold. The respondents also highlighted that Sections 122 and 122A of the Customs Act outline the adjudication process for confiscations and penalties.

The Court acknowledged that Section 121 of the Customs Act allows for the confiscation of sale proceeds of excisable goods when sold by individuals with knowledge of their excisable nature. While the respondents argued that this provision extends to attaching bank accounts to safeguard revenue interests, the Court noted that no adjudication had taken place in this case. The Court referred to an unreported judgment emphasizing that there is no provision in the Customs Act for interim attachment of bank accounts pending investigation. Relying on this legal stance, the Court concluded that the power to pass an interim order of attachment of bank accounts is not envisaged under Section 121 of the Customs Act. Therefore, the suspension of bank account operations by the authorities was deemed unsustainable.

The Court clarified that its decision was limited to the issue of whether Section 121 empowered the authorities to attach bank accounts temporarily. It directed the authorities to take appropriate legal actions against the petitioners within the bounds of the law. Consequently, the writ petition succeeded, with no costs imposed on either party.

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